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EX-32 - EXHIBIT 32.2 - Alternative Investment Corpexhibit322.htm
EX-32 - EXHIBIT 32.1 - Alternative Investment Corpexhibit321.htm
EX-31 - EXHIBIT 31.2 - Alternative Investment Corpexhibit312.htm
EX-31 - EXHIBIT 31.1 - Alternative Investment Corpexhibit311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________


FORM 10-Q

______________


x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2017


OR


o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ___________to___________.


Commission File Number: 001-34858

_____________________________________________________


ALTERNATIVE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

_____________________________________________________


Nevada

 

98-056807

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

150 East 52nd Street, Suite 1102

New York, NY

 

10022

(Address of principal executive offices)

 

(Zip Code)


(650) 577-5933

(Registrant’s telephone number, including area code)


1900 South Norfolk Street, Suite 350, San Mateo, CA 94403

(Former address)

_____________________________________________________


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x   No  o


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  x   No  o


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company" in Rule 12b-2 of the Exchange Act:


Large accelerated filer ¨

 

Accelerated filer ¨

Non-accelerated filer   ¨

(Do not check if a smaller reporting company)

Smaller reporting company x


Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.   Yes  x   No  o


As of September 12, 2017 the registrant had 8,638,750 shares of its Common Stock, $0.001 par value, outstanding.







ALTERNATIVE INVESTMENT CORPORATION

FORM 10-Q

JUNE 30, 2017

INDEX



PART I -- FINANCIAL INFORMATION

Page

 

 

 

Item 1.

Condensed Financial Statements

3

 

Condensed Balance Sheets as of June 30, 2017 (unaudited) and September 30, 2016

3

 

Condensed Statements of Operations for the Three and Nine Months ended June 30, 2017 and 2016 (unaudited)

4

 

Condensed Statements of Cash Flows for the Nine Months Ended June 30, 2017 and 2016 (unaudited)

5

 

Notes to Condensed Financial Statements (unaudited)

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

12

Item 4.

Controls and Procedures

12

 

 

 

PART II -- OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

13

Item 1.A.

Risk Factors

13

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

13

Item 3.

Defaults Upon Senior Securities

13

Item 4.

Mine Safety Disclosures

13

Item 5.

Other Information

13

Item 6.

Exhibits

14

 

 

 

SIGNATURE

14







2





PART I – FINANCIAL INFORMATION


Item 1.    Financial Statements


ALTERNATIVE INVESTMENT CORPORATION

Condensed Balance Sheets


 

June 30,

 

September 30,

 

2017

 

2016

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

9,262 

 

$

47,428 

Due from Fingi

 

 

 

56,502 

Interest receivable

 

23,536 

 

 

9,654 

Prepaid expenses

 

813 

 

 

 

Investment in commercial paper

 

200,000 

 

 

200,000 

Total current assets

 

233,611 

 

 

313,584 

 

 

 

 

 

 

Acquisition deposit

 

 

 

340,000 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

Notes receivable Fingi

 

50,000 

 

 

Loan receivable

 

11,000 

 

 

Total assets

$

294,611 

 

$

653,584 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

20,316 

 

$

37,657 

Credit card payable

 

20 

 

 

 

Accrued expenses

 

14,049 

 

 

21,500 

Amount due to shareholder

 

322,490 

 

 

312,490 

Due to B&B Capital

 

54,000 

 

 

Due to Fingi, Inc.

 

6,551 

 

 

Total current liabilities

 

417,426 

 

 

371,647 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

Loan payable

 

82,000 

 

 

Total liabilities

 

499,426 

 

 

371,647 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

Common stock, $.001 par value, 1,600,000,000 shares authorized, 8,648,808 shares issued and 8,638,750 shares outstanding at June 30, 2017 and September 30, 2016, respectively

 

8,649 

 

 

8,649 

Additional paid-in capital

 

470,706 

 

 

463,610 

Common stock issuable, 15,761,500 shares

 

574,975 

 

 

574,975 

Treasury stock, at cost

 

(80)

 

 

(80)

Accumulated deficit

 

(1,259,065)

 

 

(765,217)

Total stockholders' deficit

 

(204,815)

 

 

281,937 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

$

294,611 

 

$

653,584 


See accompanying notes to condensed financial statements.




3





ALTERNATIVE INVESTMENT CORPORATION

Condensed Statements of Operations

(unaudited)


 

For the Three Months Ended

June 30,

 

For the Nine Months Ended

June 30,

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

13,355 

 

 

46,634 

 

 

495,221 

 

 

160,139 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operation

 

(13,355)

 

 

(46,634)

 

 

(495,221)

 

 

(160,139)

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

4,729 

 

 

4,490 

 

 

13,881 

 

 

12,511 

Interest expense

 

(5,125)

 

 

(7,027)

 

 

(12,508)

 

 

(9,613)

Total other income (expense)

 

(396)

 

 

(2,537)

 

 

1,373 

 

 

2,898 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(13,751)

 

 

(49,171)

 

 

(493,848)

 

 

(157,241)

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(13,751)

 

$

(49,171)

 

$

(493,848)

 

$

(157,241)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.00)

 

$

(0.01)

 

$

(0.04)

 

$

(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding  - Basic and Diluted

 

24,400,250 

 

 

8,638,785 

 

 

24,400,250 

 

 

8,638,785 


See accompanying notes to condensed financial statements.




4





ALTERNATIVE INVESTMENT CORPORATION

Condensed Statements of Cash Flows

(unaudited)


 

For the Nine Months Ended

June 30,

 

2017

 

2016

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(493,848)

 

$

(157,241)

Loss taken on acquisition deposit

 

310,000 

 

 

Adjustments to reconcile net loss to net cash used in operations:

 

 

 

 

 

Accretion of beneficial conversion feature as interest

 

7,096 

 

 

2,157 

Changes in operating assets and liabilities:

 

 

 

 

 

Interest receivable

 

(13,882)

 

 

(6,512)

Credit card payable

 

20 

 

 

Prepaid expenses

 

(813)

 

 

Accounts payable

 

(17,341)

 

 

38,334 

Due to Related Party

 

 

 

5,000 

Accrued expenses

 

(7,451)

 

 

(3,465)

Net cash used in operating activities

 

(216,219)

 

 

(121,727)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Acquisition deposits

 

30,000 

 

 

(250,000)

Due from Fingi, Inc and other related parties

 

56,502 

 

 

(50,000)

Net cash used in investing activities

 

86,502 

 

 

(300,000)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from issuance of loan payable

 

82,000 

 

 

Payments on notes payable

 

 

 

(37,039)

Increase in notes receivable

 

(50,000)

 

 

Increase in loan receivable

 

(11,000)

 

 

Proceeds from shareholder

 

10,000 

 

 

Proceeds from loan to related companies

 

60,551 

 

 

Proceeds from capital contributions by related party

 

 

 

7,027 

Proceeds from sale of common stock subscriptions

 

 

 

374,975 

Net cash provided by financing activities

 

91,551 

 

 

344,963 

 

 

 

 

 

 

Net (decrease) increase in cash

 

(38,166)

 

 

(76,764)

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

47,428 

 

 

124,531 

Cash and cash equivalents at end of period

$

9,262 

 

$

47,767 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid for interest

$

 

$

Cash paid for taxes

$

 

$

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

Beneficial conversion feature on convertible note payable

$

 

$


See accompanying notes to condensed financial statements.





5





ALTERNATIVE INVESTMENT CORPORATION

Notes to Condensed Financial Statements June 30, 2017

(unaudited)


Note 1 – Nature of Business, Presentation and Going Concern


Organization


Alternative Investment Corporation (the "Company") was incorporated in Nevada on March 26, 2007 under the name of China Digital Ventures Corporation.  The principal business of the Company was its web-based telecom and IPTV businesses, both of which were disposed of during the year ended September 30, 2010. As of the date hereof, the Company has no operations.


On July 23, 2010, the Company experienced a change in control. Canton Investments Ltd (“CIL” or “Canton”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between CIL and Wireless One International Limited (“Wireless One”), Bing HE and Ning HE, the Company’s former directors, and other various shareholders. On the closing date, July 23, 2010, pursuant to the terms of the Stock Purchase Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 28,750,000 shares of the Company’s outstanding common stock for $205,750. Also on July 23, 2010, CIL purchased 6,100,000 shares of the Company’s outstanding common stock for $36,600 from various shareholders. As a result of the change in control, CIL owned a total of 34,850,000 shares of the Company’s common stock representing 91.54%.


On May 10, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Paradigm Resource Management Corporation.


On September 10, 2012, CIL contributed 30,000,000 shares of common stock to the Company’s treasury. The Company immediately retired and canceled these shares. As a result of the contribution of shares, CIL owns a total of 4,850,000 shares of the Company’s common stock representing 60%.


On July 24, 2013, the Company entered into an agreement with AMSA Development Technology Co Ltd (“AMSA”) to acquire 402,300 shares of TOSS Plasma Technologies Ltd. (“TPT”) previously held by AMSA in exchange for 896,667 shares of its common stock. The 402,300 shares of TPT represent 10.1% of TPT’s outstanding common stock. The agreement also provides AMSA an option to acquire an additional 1,120,833 shares of the Company’s common stock and provides the Company an option to acquire an additional 402,300 shares of TPT common stock from AMSA.


On December 4, 2013, the Company and AMSA entered into an Amendment to the Agreement dated July 24, 2013. Under the terms of the amendment, the Company had the option to acquire up to a total of 3,432,000 shares of TPT from AMSA and AMSA had the option to acquire up to a total of 5,746,667 shares of common stock of the Company. The options expired on June 2, 2014.


On September 10, 2015, the Company and AMSA entered into a Rescission Agreement to fully rescind the previous acquisition agreement of shares of TPT and returned previously issued shares of each company to each other.


On September 18, 2015, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Alternative Investment Corporation.


On April 1, 2016, the Company entered into a Shareholders’ Agreement (the “Agreement”) with Basil and Barns, Inc., a New York corporation incorporated on February 2, 2016, (“B&B Inc.”), Fess Holdings LLC, Basil and Barns LLC and JIF Holdings LLC to acquire 55% of the outstanding common shares of B&B Inc.


On February 27, 2017, the Company entered into an agreement with B&B Inc, Fess, Basil and Barns LLC and JIF Holdings LLC, wherein the Company has been unable to provide funding as per the original Agreement, having only provided $360,000 to date, the parties agreed to allow the Company to assign its remaining funding obligations and its ownership shares to a new ownership, in consideration of $50,000 to be paid to the Company and forfeiture of the $360,000 acquisition deposit. As of February 27, 2017, the Company is no longer participating in the original Agreement, directly or through related parties.


Basis of Presentation


The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.



6





ALTERNATIVE INVESTMENT CORPORATION

Notes to Condensed Financial Statements June 30, 2017

(unaudited)


In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of the financial position at June 30, 2017 and the results of operations and cash flows for the three months ended June 30, 2017 and 2016, have been made.


These unaudited condensed financial statements should be read in conjunction with our 2016 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on January 13, 2017.


Going Concern


The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $493,848 for the nine months ended June 30, 2017 and has incurred cumulative losses since inception of $1,259,065.  The Company has a stockholders’ deficit of $204,815 at June 30, 2017. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.


The ability of the Company to continue as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and implement its business plan. No assurance can be given that the Company will be successful in these efforts.


The unaudited condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. No assurance can be given that the Company will be successful in these efforts.


Note 2 – Related Party Transactions


As of June 30, 2017 and September 30, 2016, $322,490 and $312,490 were due respectively to Canton. The loan is unsecured, non-interest bearing and there is no repayment date. Interest has been calculated at imputed interest rate of 3% and amounted to $7,097 for the nine months ended June 30, 2017. The imputed interest amounted to $2,157 for the nine months ended June 30, 2016.


On April 1, 2016 the Company issued a loan to Fingi Inc., a company of which Canton may be deemed a controlling person, in the amount of $50,000. The terms include no monthly payments with interest compounding monthly at an annual rate of four percent (4%). The entirety of the accrued interest and principal were originally due on December 31, 2016. The Company agreed to extend the loan agreement through December 31, 2017 as such an allowance for the $50,000 loan balance has not been recorded and is deemed collectible. For the three and nine months ended June 30, 2017, $521 and $1,484, respectively, has been recognized as interest income and included in accompanying condensed statements of operations.


On February 2, 2016, the Company entered into an expense sharing agreement with Fingi Inc. Under the expense sharing agreement, the Company shares the rent and utility expenses incurred in connection with occupancy of office space that is being leased by Fingi Inc. For the nine months ended June 30, 2017, total rent and utilities expenses amounted to $47,875. At June 30, 2017, amounts due to Fingi represent amounts due for rent and utilities, or amount paid for expenses on behalf of the Company by Fingi.


Note 3 – Acquisition Deposit


Effective April 1, 2016, the Company entered into a Shareholders’ Agreement (the “Agreement”) with Basil and Barns, Inc., a New York corporation incorporated on February 2, 2016, (“B&B Inc.”), Fess Holdings LLC (“Fess”), Basil and Barns LLC and JIF Holdings LLC to acquire 55% of the outstanding common shares of B&B Inc. Under the Agreement, the Company is to invest $1,400,000 including a $600,000 capital contribution for its 55% interest in B&B Inc., a $500,000 3 year loan at 7% interest per annum, and $300,000 line of credit. The Company has also agreed to provide up to an additional $1,800,000 of asset-based loans for purchases of new assets as required. B&B Inc. is to acquire 110 acres of land in Bethel, NY which is to be developed into a hotel property. Financial statements or pro-forma financial statements have not been provided herein as B&B Inc. was formed on February 2, 2016 and has no assets or liabilities.




7




ALTERNATIVE INVESTMENT CORPORATION

Notes to Condensed Financial Statements June 30, 2017

(unaudited)


During the year ended September 30, 2016, the Company paid a total of deposits of $340,000 towards the anticipated amounts.


On February 27, 2017, the Company entered into an agreement with B&B Inc, Fess, Basil and Barns LLC and JIF Holdings LLC, wherein the Company has been unable to provide funding as per the original Agreement, having only provided $360,000 to date, the parties agreed to allow the Company to assign its remaining funding obligations and its ownership shares to a new ownership, in consideration of $50,000 to be paid to the Company and forfeiture of the $360,000 acquisition deposit. As of February 27, 2017, the Company is no longer participating in the original Agreement, directly or through related parties. As of December 31, 2016, the Company recorded a forfeiture of the acquisition deposit of $310,000 in the accompanying statement of operations.


Note 4 – Loan Receivable


On January 18, 2017, the Company issued a loan to B&B Inc. in the amount of $11,000 at annual rate of eight percent (8%) and is due on July 18, 2018. Interest income for the three months ended June 30, 2017 was $219.


Note 5 – Investment in Commercial Paper


During the year ended September 30, 2015, the Company invested in two $100,000 convertible bonds from Bullion Japan Inc. for a total investment of $200,000. The bonds mature June 8, 2017 and July 3, 2017, respectively, earn interest at eight percent (8%) per annum paid quarterly, and are convertible into common stock of Bullion Japan Inc. at the Company’s option any time prior to the maturity date at a price of JPY ¥8,035 ($6.46) per share. As of June 30, 2017 and September 30, 2016, $6,471 and $4,450 of interest has been accrued and included in the condensed balance sheets, respectively. For the three and nine months ended June 30, 2017, $3,989 and $8,021 has been recognized as interest income and included in the condensed statements of operations, respectively.


Note 6 – Loan Payable


During the three months ended March 31, 2017, the Company entered into loan agreements with Fess Group Holdings LLC totaling $82,000 with maturity dates through July 2018. These loans incur interest at either percent (8%) per annum. Accrued interest for the three months ended June 30, 2017 was $1,636.


During the three months ended March 31, 2017, the Company also entered into loan agreement with Basil and Barns Capital Inc. totaling $54,000 with maturity dates through July 2017. These loans incur interest at either percent (8%) per annum. Accrued interest for the three months ended June 30, 2017 was $1,077.


Note 7 – Stockholders’ Deficit


The Company has authorized 1,600,000,000 shares of Common Stock, $0.001 par value. As of June 30, 2017 and September 30, 2016, the Company had 8,648,808 shares of Common Stock issued and 8,638,750 shares outstanding.


Note 8 – Subsequent Events


The Company has evaluated subsequent events through the date the condensed financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no other such events that warrant disclosure or recognition in the condensed financial statements.







8





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS


Certain statements made in this Form 10-Q are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate and, therefore, there can be no assurance the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.


The forward-looking statements included in this Form 10-Q and referred to elsewhere are related to future events or our strategies or future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "future," "potential," "estimate," "encourage," "opportunity," "growth," "leader," "expect," "intend," "plan," "expand," "focus," "through," "strategy," "provide," "offer," "allow," commitment," "implement," "result," "increase," "establish," "perform," "make," "continue," "can," "ongoing," "include" or the negative of such terms or comparable terminology. All forward-looking statements included in this Form 10-Q are based on information available to us as of the filing date of this report, and the Company assumes no obligation to update any such forward-looking statements, except as required by law. Our actual results could differ materially from the forward-looking statements.


Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our condensed financial statements and related notes included elsewhere in this report.


Company Overview


Alternative Investment Corporation (the "Company") was incorporated in Nevada on March 26, 2007 under the name of China Digital Ventures Corporation.  The principal business of the Company was its web based telecom and IPTV businesses, both of which were disposed of during the year ended September 30, 2010. As of the date hereof, the Company has no operations.


On July 23, 2010, the Company experienced a change in control. Canton Investments Ltd (“CIL” or “Canton”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between CIL and Wireless One International Limited (“Wireless One”), Bing HE and Ning HE, the Company’s former directors, and other various shareholders. On the closing date, July 23, 2010, pursuant to the terms of the Stock Purchase Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 28,750,000 shares of the Company’s outstanding common stock for $205,750. Also on July 23, 2010, CIL purchased 6,100,000 shares of the Company’s outstanding common stock for $36,600 from various shareholders. As a result of the change in control, CIL owned a total of 34,850,000 shares of the Company’s common stock representing 91.54%.


On May 10, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Paradigm Resource Management Corporation.


On September 10, 2012, CIL contributed 30,000,000 shares of common stock to the Company’s treasury. The Company immediately retired and canceled these shares. As a result of the contribution of shares, CIL owns a total of 4,850,000 shares of the Company’s common stock representing 60%.




9




On July 24, 2013, the Company entered into an agreement with AMSA Development Technology Co Ltd (“AMSA”) to acquire 402,300 shares of TOSS Plasma Technologies Ltd. (“TPT”) previously held by AMSA in exchange for 896,667 shares of its common stock. The 402,300 shares of TPT represent 10.1% of TPT’s outstanding common stock. The agreement also provides AMSA an option to acquire an additional 1,120,833 shares of the Company’s common stock and provides the Company an option to acquire an additional 402,300 shares of TPT common stock from AMSA.


On December 4, 2013, the Company and AMSA entered into an Amendment to the Agreement dated July 24, 2013. Under the terms of the amendment, the Company had the option to acquire up to a total of 3,432,000 shares of TPT from AMSA and AMSA had the option to acquire up to a total of 5,746,667 shares of common stock of the Company. The options expired on June 2, 2014.


On September 10, 2015, the Company and AMSA entered into a Rescission Agreement to fully rescind the previous acquisition agreement of shares of TPT and returned previously issued shares of each company to each other.


On September 18, 2015, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Alternative Investment Corporation.


On April 1, 2016, the Company entered into a Shareholders’ Agreement (the “Agreement”) with Basil and Barns, Inc., a New York corporation incorporated on February 2, 2016, (“B&B Inc.”), Fess Holdings LLC, Basil and Barns LLC and JIF Holdings LLC to acquire 55% of the outstanding common shares of B&B Inc.


On February 27, 2017, the Company entered into an agreement with B&B Inc, Fess, Basil and Barns LLC and JIF Holdings LLC, wherein the Company has been unable to provide funding as per the original Agreement, having only provided $360,000 to date, the parties agreed to allow the Company to assign its remaining funding obligations and its ownership shares to a new ownership, in consideration of $50,000 to be paid to the Company and forfeiture of the $360,000 acquisition deposit. As of February 27, 2017, the Company is no longer participating in the original Agreement, directly or through related parties.


Management is focused on new investment opportunities in the real estate sector with primary focus on distressed real estate assets and/or alternative real estate developments.


Plan of Operation


The Company is focused on new investment opportunities in the real estate sector with primary focus on distressed real estate assets and/or alternative real estate developments.


Results of Operations


For the Three Months Ended June 30, 2017 and 2016


Revenues


The Company had no revenue for the three months ended June 30, 2017 and 2016.


Operating Expenses


For the three months ended June 30, 2017 total operating expenses were $13,355 compared to $46,634 for the three months ended June 30, 2016 resulting in a decrease of $33,279. The decrease in operating expenses primarily relates to decreases in professional fees.


We incurred $5,125 of interest expense for the three months ended June 30, 2017 compared to $7,027 in the three months ended June 30, 2016. We realized $4,729 of interest income for the three months ended June 30, 2017 compared to $4,490 for the three months ended June 30, 2016. Our net loss to our shareholders for the three months ended June 30, 2017 and 2016 was $13,751 and $49,171, respectively.





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For the Nine Months Ended June 30, 2017 and 2016


Revenues


The Company had no revenue for the nine months ended June 30, 2017 and 2016.


Operating Expenses


For the nine months ended June 30, 2017 total operating expenses were $495,221 compared to $160,139 for the nine months ended June 30, 2016 resulting in an increase of $335,083. The increase in operating expenses primarily relates to the write off of the acquisition deposit.


We incurred $12,508 of interest expense for the nine months ended June 30, 2017 and $9,613 for the nine months ended June 30, 2016. We realized $13,881 of interest income for the nine months ended June 30, 2017 compared to $12,511 for the nine months ended June 30, 2016. Our net loss to our shareholders for the nine months ended June 30, 2017 and 2016 was $493,848 and $157,241, respectively.


Liquidity and Capital Resources


Overview


As of June 30, 2017, the Company cash of $9,262 and a deficit in working capital of $183,815. Historically, our operating expenses have been funded and paid by CIL and by the issuance of notes payable and sale of our common stock.


We do not have sufficient resources to effectuate our business. We expect to incur a maximum of $1,000,000 in expenses and acquisitions during the next twelve months of operations.


Liquidity and Capital Resources during the Nine Months Ended June 30, 2017 compared to the Nine Months ended June 30, 2016


We used cash for operating activities of $216,219 and $121,727 for the nine months ended June 30, 2017, and 2016, respectively. The elements of cash flow used in operations for the nine months ended June 30, 2017, included a net loss of $493,848 initially offset by the write off of $310,000 of the acquisition deposit. Cash flows are then decreased by a $13,882 increase in interest receivable, an $813 increase in prepaid expenses, a $7,451 decrease in accrued expenses, and a decrease of $17,341 in accounts payable. The elements of cash flow used in operations for the nine months ended June 30, 2016 included a net loss of $157,241 offset by an increase in net operating assets and liabilities of $33,357.


We collected $86,502 of cash in investing activities primarily due to recovering a net of $30,000 in cash by paying $20,000 towards the acquisition deposit offset by subsequent receipt of $50,000 for the cancellation of the deposit during the nine months ended June 30, 2017. We used $300,000 in cash for investing activities during the nine months ended June 30, 2016.


Cash provided by our financing activities was $91,551 for the nine months ended June 30, 2017, compared to cash generated of $344,963 during the comparable period in 2016. The financing activities for the nine months ended June 30, 2017 consisted of proceeds from loans payable of $82,000 as well as a total loans from shareholder and related companies of $70,551, offset by increases in notes and loans receivable of $50,000 and $11,000 respectively. The cash provided by financing activities for the nine months ended June 30, 2016 consisted of $374,975 of proceeds from a common stock subscriptions offset by payments towards notes payable of $37,039.


We will have to raise funds to pay for our expenses. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.




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Going Concern


Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the audited financial statements for the year ended September 30, 2016 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.


Our unaudited condensed financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited condensed financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.


There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.


Off-Balance Sheet Arrangements


We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


Critical Accounting Policies


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.


See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited financial statements for the year ended September 30, 2016, included in our Annual Report on Form 10-K as filed on January 13, 2017, for a discussion of our critical accounting policies and estimates.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.


Item 4.  Controls and Procedures.


(a)

Evaluation of Disclosure Controls and Procedures


In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company's management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of June 30, 2016. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under  the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.




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Based on that evaluation, the Company's management concluded, as of the end of the period covered by this report, that the Company's disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required  to  be disclosed, within the time periods specified in the Commission's rules and forms, and that such information was accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.


(b)

Changes in Internal Control over Financial Reporting


There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



PART II - OTHER INFORMATION


Item 1.  Legal Proceedings


We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self- regulatory organization or body pending or, to the knowledge of the executive officers of our company, threatened against or affecting our company or our common stock in which an adverse decision could have a material adverse effect.


Item 1A.  Risk Factors


The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


None.


Item 3.  Defaults Upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures


Not applicable.


Item 5.  Other Information.


None.






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Item 6. Exhibits


Exhibit 31.1

Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).


Exhibit 31.2

Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).


Exhibit 32.1

Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


Exhibit 32.2

Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS

XBRL Instance Document


101.SCH

XBRL Taxonomy Extension Schema Document


101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document


101.DEF

XBRL Taxonomy Extension Definition Linkbase Document


101.LAB

XBRL Taxonomy Extension Label Linkbase Document


101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document










SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date:  September 12, 2017

By:

/s/ Daniel Otazo

 

 

Daniel Otazo

 

 

Interim Chief Executive Officer, Chief Financial Officer (Principal Executive and Financial Officer)






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